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The Review of Austrian Economics

, Volume 26, Issue 1, pp 73–91 | Cite as

Nineteenth century London water supply: Processes of innovation and improvement

  • Nicola Tynan
Article
  • 604 Downloads

Abstract

Public health concerns played a major role in driving the shift from private to government ownership of water works in Britain and the US. Poor water quality is one of the criticisms made of the eight water companies providing piped water to London during the nineteenth century. Critics argued that monopolistic water companies failed to invest in filtration, move their intake, increase capacity or expand their network until compelled to do so by regulation. Critics have taken a static view: looking at water and sanitation in London at a moment in time and identifying actions that the water companies could take that could improve water quality and, consequently, public health. Taking an Austrian process approach, however, shows that companies were continually investing to increase access to piped water and to improve water quality during a time of severe uncertainty and knowledge problems. Water companies often acted before the government to improve quality: early competition encouraged investment and innovation, while later government regulation followed entrepreneurs’ leads and imposed on all water companies improvements already implemented by some. Government decisions were responsible for much of the deterioration in water quality.

Keywords

Water supply Innovation Market process 
JEL Classification B53 N93 L95 

Notes

Acknowledgements

I am grateful for constructive comments and suggestions from two anonymous referees. I also thank John Sinisi for encouragement and Qian Zhang for excellent research assistance.

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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Economics DepartmentDickinson CollegeCarlisleUSA

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